Transcript SME Support Policies & Practice: Role of SME Associations

Development of Micro Enterprises:
Issues & Recommendations
Presented by :
Gyan Prakash Agarwal, Secretary General
World Association for Small and Medium Enterprises (WASME)
at
2011 Global Summit of Women
Growing Microenterprises into the Mainstream Economy
Istanbul, Turkey: May 7, 2011
Contents
 Introduction
 Role & Significance of Micro Enterprises (MEs)
 Characteristics of MEs
 Factors contributing to the growth of MEs
 Development of MEs: Benefits
 Major Constraints hindering MEs’ access to Productive
Resources
 Development of MEs: Recommendations
Introduction
 Non-crop production economic activities
 Whole range of productive activities including trading,
services, and manufacturing
 Defined by using different criteria: size of employment,
level of income or asset size
 Proliferation of MEs: (i) Gaps between the services
available and needs of low income households; and (ii)
Lack of formal and sustainable employment opportunities
 Livelihood Enterprises and Growth-oriented Enterprises
 Majority of MEs operating in informal sector
Role & Significance of MEs
 Comprise bulk of all enterprises
 Contribute a significant share of employment and
value-added to the economy
 Help ensure a more equitable distribution of
income
 Dispense economic activities to the countryside
 Poverty reduction and empowerment of women
 A potent force in the war against poverty
Characteristics of MEs
 Independent and largely family owned
 Very limited geographic markets
 Many MEs activities are seasonal
 Most operate at their place of residence
 Require very little productive resources – skill,
labour, capital, equipment, assets
 Employ low levels of skills and technology
 Easy to engage in and exit from
Factors contributing to
the growth of MEs
 Financing
 Markets
 Places of doing business
 Equipment and other physical assets
 Technology
 Appropriate market information
 Skills
 Linkage to formal sector
Development of MEs: Benefits
 Poverty reduction
 Additional employment opportunities
 Increase in collection of taxes
 Increase in contributions to GDP
 Enhancement in socio-economic status of
poor
 Inclusive growth of nation
 Achieving Millennium Development Goals
Major Constraints hindering MEs’
Access to Productive Resources
Lack of conducive policy environment
Lack of access to institutional credit
Lack of infrastructure
Imperfect market information
Lack of opportunities for skills development
Weak
presence
institutions
and
reach
of
support
Development of MEs: Recommendations
 Favourable policy environment
 Overcome
institutional obstacles to
effective MEs development programmes
implementing
 Development Impact Objectives: Based on the distinction
between Livelihood & growth-oriented micro enterprises
 Priority Thrusts: New enterprises promotion, enterprise
expansion and enterprise transformation
 Critical Productive Resources: Access of MEs’ to critical
productive resources such as financing, markets, premises and
places for doing business, equipment and other physical
assets, technology, skills, market information, business
development services
Thank You